If you are in between jobs, whether
by your choice or that of your former employer, you may have discovered that acquiring
reasonably priced health insurance is no easy feat. COBRA,
the federal continuation health coverage plan, gives you the opportunity to continue
with your previous policy, but the high premiums probably put it out of reach.
Some people find short-term health insurance, also known as
temporary insurance, to be an affordable alternative. It helps bridge the gap
between having an employer-sponsored plan and having nothing at all.
Leaving a job often means leaving group health coverage, a risky
move if you don't have any additional insurance. "You roll
the dice by going uninsured, and you can only test your luck for
so long," says Renee Guariglia, executive vice president and
benefit specialist at Falcone Associates Inc. in Syracuse, N.Y.
Short-term insurance products
help remove the gamble by offering restricted policies. Typically, they only protect
against unforeseen sickness or injury.
"It would not
be a great product to buy if during your temporary time you want to just go get
an annual checkup with the doctor," says David Andrews, vice president of
product management at Assurant Health, a Milwaukee, Wis.-based insurance provider
with a short-term insurance specialty.
"But say you have
a short-term policy and you spike a fever of 103 degrees and you choose to go
to the doctor. As long as it is not a pre-existing condition, the doctor's visit
is covered. If the doctor prescribes you medication, that is covered. If you need
to go to the hospital, that is covered. But if during that same time you say,
'I want to go get a physical because I'm thinking of running a race next month,'
in most states and with most policies, that would not be covered."
everyone sees this insurance as a cure-all. Many policyholders believe that insurance
providers are using pre-existing conditions clauses to deny legitimate claims
that should be paid.
After receiving more than two dozen recent
complaints about rejected claims, Connecticut Attorney General Richard Blumenthal
has asked his state's insurance commissioner to audit certain insurance companies,
including those that offer temporary insurance, to determine if they are refusing
to pay claims based on "questionable conclusions that patients' medical conditions
pre-existed their insurance policies."
the outcome of this audit, pregant women, and people who are undergoing current
treatments for chronic conditions, are probably better served with continuation
coverage under COBRA.
"You usually have to be very healthy
to qualify for (temporary) plans," says Philip Grisafi, a senior consultant
with Mosse and Mosse Associates, an employee benefits consulting firm in Lynnfield,
Andrews says that short-term policies are restrictive
"We do very limited underwriting (for temporary
plans)," he says. "We are not gathering lots of information (on policyholders),
so we have to be very careful about what things we are able to cover."
|Facts about short-term health insurance:|
generally cover unforeseen illness and injury.|
typically lasts from 30 days up to a year.|
conditions are generally excluded.|
are usually cheaper than insurance premiums under COBRA.|
are true insurance plans under government guidelines, not private "reimbursement"